Colorado estate planning – everyone should know
Denver estate planning attorney
Brian Stutheit offers simple estate planning ideas everyone should know:
1) Every adult should consider having a health care power of attorney. A medical directive instructs your loved ones and health care providers how you wish to be treated if you become incapacitated. It allows you to control who makes decisions on your behalf, and to authorize those close to you to speak to your doctors and know about your medical condition. Without a health care power of attorney or medical directive, privacy laws may prevent your doctors from talking to family members. With a health care power of attorney, you can leave explicit instructions about the nature of your health care, and avoid family feuds over who makes decisions.
2) Do not fall for high pressure tactics. Attorneys sell their products. Is your lawyer helping you to plan, or up selling? Before you pay big dollars for a trust or complicated estate plan, you should understand clearly why a trust is needed, and every simpler alternative.
3) Probate is not always a bad thing. Probate avoidance is not always a good thing.
These statements about probate are usually incorrect: “Estimates of probate costs range from 5% to 10% of the gross value of an estate before any debts are paid.” “Probate can take up to 2 years.” “During this time all assets are frozen, and the beneficiaries generally get nothing.”
The “costly” reputation comes from the fact that – in some states – attorneys are paid a percentage of the decedent’s assets. That is not allowed in Colorado. The truth is that most Colorado probates are informal, meaning there is not active court intervention, and that they can be closed in approximately six months. The truth is that probate gives heirs an opportunity to bar creditors of the estate from future collections action. Whether a decedent dies with a will or a trust, whether the estate is subject to probate or not subject to probate, much of the same work must be done. Assets must be valued and transferred. Debts and expenses must be determined and settled. The decedent’s final income tax return must be filed. Creating a trust avoids none of these chores.
4) Every family with young children or a special needs child should have a plan in place for guardianship and custody in the event the parents die, and for managing a child’s support. This can prevent fighting between the husband’s family and the wife’s. It will assure that someone has promised to care for your children. It will allow you, as parents, to specify who controls life insurance, the family home, and other assets until your children are old enough to manage it themselves, and to restrict what it may be spent for.